He said there is currently an imbalance between supply and demand - and new Build-To-Order (BTO) flats take three years to build.
Mr Khaw said this in response to questions from reporters on the sidelines of a community event on Sunday.
He also expressed confidence that resale flat prices will stabilise but stressed that the problem of high prices cannot be solved overnight. He urged Singaporeans to be patient.
On Friday, figures from the HDB showed prices rising by 3.1 per cent in the second quarter of this year, nearly twice the previous quarter's 1.6 per cent.